Bank of America stock nearing $5 danger zone

@CNNMoneyInvest November 29, 2011: 6:40 PM ET
Bank of America stock, BAC

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NEW YORK (CNNMoney) -- Another trading day and another low for Bank of America's stock.

Shares of Bank of America (BAC, Fortune 500) dropped more than 3% Tuesday, hitting a new 52-week low of $5.03 -- its lowest level since March 12, 2009.

After the close of trading Tuesday, Bank of America was one of 37 financial institutions downgraded by S&P.

Beyond the S&P downgrade, trading could become even more complicated in Bank of America's stock, if it falls below $5. Under that threshold, many broker-dealers will not allow investors to buy or short a stock on margin, according to a spokesperson for the New York Stock Exchange.

Buying on margin means that an investor can simply put down 50% of the price of a stock initially, and the trading firm advances the rest.

It's been a tough year for the troubled bank, which has seen its share price decline roughly 62% from the start of the year.

Among other challenges, Bank of America has struggled under mounting issues related to its mortgage business.

The bank's rapidly declining share price is likely to increase pressure on the bank to slim down and sell assets. Bank of America has already said it plans to lay off 30,000 workers over the next several years.

Back in September, when that layoff announcement was made, investors worried about Bank of America's stock falling below a psychologically jarring level of $6. It dropped below that level on Oct. 3.

As Bank of America's shares are still relatively far from the stock's all-time intraday low of $2.53 hit on Feb. 20, 2009.

A spokesperson for Bank of America said the bank does not comment on its share price.

Despite a rally in the stock market Tuesday, shares of most other major banks including Goldman Sachs (GS, Fortune 500), Morgan Stanley (MS, Fortune 500), and JPMorgan Chase (JPM, Fortune 500) fell.

CNNMoney's Hibah Yousuf contributed to this article.  To top of page

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